July 13, 2003

Limited Liability Corporations in a Free Society

A very interesting article on the legitimacy of limited liability corporations by Bob Murphy, one of the most promising libertarian scholars around:

limited liability corporations are compatible with standard libertarian legal theory, only if the original founders (or subsequent individuals who buy the company and assume full responsibility) maintain full liability for damages caused by agents of the corporation. Individuals cannot evade responsibility for actions by hiding behind the legal fiction of a corporate "person."